This week, I want to expand on the topic of "no money down" investing, which I discussed with Brandon Turner in Monday's interview.
Today, I want to address the topic in general--is no money down investing a real thing?
The short answer is yes and no. To think that you can invest in real estate without needing any money of any kind is inaccurate. When people say that you can invest with "no money down," they mean that you can invest with none of your money down.
The most common way to invest with no money down is that you're using someone else's money. This could be a private investor or even a family member or acquaintance who is interested in partnering with you on a deal. This is how I've done the vast majority of my deals! An investor will give you the money to buy and rehab a house while you put in the work and time to make the flip happen. You could also find a hard money lender who will fund the deal within certain parameters. Notice that the hard money lender is putting money down, but you're not. So to say that there won't be money put down anywhere is not true. You may even have to put in a small percentage of the money yourself. There's many other ways to do fund a deal with little or none of your money down; Brandon goes over these in detail in his new book.
So when you hear that it doesn't take any money to invest in real estate, that's only a half-truth; it doesn't necessarily take any of your own money, but somebody somewhere is putting money down. Still, not needing money of your own to invest in real estate is powerful, and I've built my entire career on this! Even people who do have money most often fund deals with someone else's money.
Your job is to find and build relationships, whether it be with an institution or a person, to the point that they will loan you money to invest in real estate. You can definitely do the real estate thing without having any savings to start with.
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